Hot Topics

Find the solutions you need by accessing our extensive portfolio of information, analytics and expertise. The IHS Markit team of subject matter experts, analysts and consultants offers the actionable intelligence you need to make informed decisions.

FEATURED EVENTS

Find the solutions you need by accessing our extensive portfolio of information, analytics and expertise. The IHS Markit team of subject matter experts, analysts and consultants offers the actionable intelligence you need to make informed decisions.

Risk-sharing as a path forward for Mexico

14 March 2018Ewa Oliveira da Silva

With a chronically underfunded public healthcare system, Mexico
has lagged behind other members of the Organisation for Economic
Co-operation and Development (OECD) in terms of uptake of
innovative therapies. The country's 2018 budget reaffirmed an
alarming trend of cuts in public health spending in Mexico, marking
the third consecutive year of real terms reductions in this area.
Although no specific amount has been set out for drug expenditure
in the budget bill, overall public expenditure on health will
amount to only 2.5% of GDP this year, compared to an average 5.5%
among the OECD's 35 members.

At the same time, owing to its large and growing population and
the increasing prevalence of lifestyle diseases, Mexico remains an
attractive market for pharmaceuticals. Against this backdrop,
innovative reimbursement solutions, such as risk-sharing
agreements, are one possible way forward for both drugmakers and
public healthcare institutions. And, as we learned recently, this
interest is not just theoretical any more: as revealed by the
director of the Mexican Association of Pharmaceutical Research
Industries (AMIIF) in February, seemingly serious talks regarding a
risk-sharing model were underway between the Mexican Institute of
Social Security (IMSS) and the pharmaceutical industry in 2017. As
reported by local news source Milenio, Cristóbal Thompson
admitted that his organisation was in negotiations with the IMSS
last year; however, talks were interrupted after the institute's
former director, Mikel Arriola, resigned to pursue a political
career and was replaced by Tuffic Miguel Ortega. Thompson's
declarations appear to be the first confirmation by an involved
party of what the influential newspaper El Economista had written
about in June last year. According to the newspaper's report at the
time, groups of experts had been tasked with working out the
details of a possible outcomes-based risk-sharing scheme in March
of 2017. According to its sources, the work focused on three areas:
the selection of therapeutic areas that the new model could be
applied to and analysis of associated epidemiological indicators,
the definition of IMSS's outcome parameters relating to each of the
areas and the respective populations, and the working out of
necessary adjustments to existing IMSS regulations from a legal
point of view. The therapeutic areas initially considered were -
allegedly - diabetes and four (unspecified) types of cancer
responsible for the greatest cost to the IMSS. As part of the
discussions, the IMSS shared its epidemiologic indicators with the
pharma industry for the first time ever, the report said.

Now, Thompson's declarations provide further proof that such
negotiations were indeed underway. Although the AMIIF director did
not reveal details, he did say that the sides had conducted "eight
months of good meetings", suggesting that progress may have been
significant. Furthermore, he confirmed that an outcomes-based
risk-sharing model was being studied, in which IMSS would only
remunerate manufacturers for the treatment of a patient with their
innovative drug if it achieved certain pre-defined results.
Examples of parameters that can be used in outcomes-based payment
models include disease-free survival, symptom control, or sustained
virologic response, to name just a few. Cristóbal Thompson
further expressed hope that the talks could be resumed. It is not
clear why they were stalled in the first place - perhaps the change
of leadership in the IMSS proved a temporary distraction. By
speaking publicly about the risk-sharing negotiations, the AMIIF
director is possibly attempting to exert pressure on the IMSS's new
leadership against squandering the progress that had been achieved
under Arriola. Thompson makes it clear that to him, outcomes-based
risk-sharing agreements between the government and the industry are
the only way forward to improve Mexico's poor uptake of
innovation.

Perhaps, as I am writing this, the sides are already back at the
negotiating table; we will certainly continue to monitor this
interesting situation as it progresses. In markets such as Mexico,
where securing reimbursement is difficult, fragmented and slow,
risk-sharing could be a game-changer in terms of access to
high-cost medicines, if only for some types of drugs. However -
crucially - even outcomes-based reimbursement requires preparedness
for potentially significant levels of investment. It will not
replace adequate funding. Considering the stagnant levels of public
expenditure on health in Mexico, innovative reimbursement models
can bring an improvement, but will not cause a revolution.